Sistema Jan-Mar profit jumps 3-fold to $380.9 mln

Sistema Jan-Mar profit jumps 3-fold to $380.9 mln New Delhi: Russian conglomerate Sistema on Wednesday said its net profit has jumped over three-folds to USD 380.9 million in January-March this year on the back of growth in its core assets portfolio and reduced loss in developing assets business, mainly in Sistema Shyam Teleservices (SSTL).

The Group registered net profit of USD 97.2 milion in Q1 2011, Sistema said in a statement.
It had posted a net loss of USD 530.2 million for the October-December 2011.

"Consolidated net income attributable to Sistema more than tripled year-on-year in the first quarter of 2012, as a result of net income growth in the core assets portfolio and a reduced loss in the developing assets portfolio, primarily in SSTL," Sistema added.

Sistema has a 56.68 percent stake in SSTL, while 17.14 percent is held by Russian government and the remaining is held by Indian group Shyam.

SSTL, which operates under the MTS brand name, saw 21 of its 22 licences being cancelled by the Supreme Court on February 2.

Since then, SSTL has filed a curative petition in the matter, while Sistema has sent a formal notice to the Republic of India invoking the Bilateral Investment Treaty (BIT) between Russia and India.

SSTL's has narrowed its net loss to Rs 527.8 crore in the January-March 2012 quarter from a net loss of Rs 666.4 crore in Q1 2011, while its revenues have grown 72 percent for the first quarter ended March 31, 2012.

Sistema's revenues in the reported quarter increased 9.3 percent to USD 7.91 billion from USD 7.24 billion in the same quarter last year.

"Sistema's consolidated revenues were up primarily as a result of higher oil prices, increased production at Bashneft and operational growth in the developing assets portfolio," it said.

However, on a quarter-on-quarter basis, the revenues were lower by 5.5 percent from USD 8.37 billion (in Q4 2011), reflecting a weaker sales structure at Bashneft and seasonal effects in the developing assets portfolio.

MTS, the group's telecom service, globally saw revenues increasing 2.7 percent year-on-year in the first quarter of 2012, reflecting growth in voice and data consumption.

Its total subscriber base exceeded 105 million customers as of March 31, 2012, resulting in a 1.9 percent year-on-year growth in subscribers.